Actual property brokers are telling potential renters they will have a greater likelihood if they provide extra. Here is why that is legally murky

Sophie* and her partner are relieved to have a roof over their heads after a nightmare experience looking for a rental in inner Brisbane.

With their lease coming to an end, Sophie turned all her attentions to finding a new place.

A two-bedroom unit within 10 kilometres to Brisbane’s CBD was the goal — somewhere close to both their workplaces.

Struggling to find a place within their price range in decent condition, Sophie stopped working in her job as an e-commerce manager to focus her days on looking for a place to live.

For two months she would wake up, check websites for new listings, contact agents, get on inspection lists, schedule inspections and, from 11am to 6pm drive around to inspections.

What she encountered was shocking.

“It was like a nightmare that we had to live every day,” she said.

Most of all, Sophie was disheartened by the more than 10 agents who encouraged her to offer more for the property.

Some were more blatant than others, though all of them would only address Sophie when they were not within earshot of other prospective tenants.

Sophie said one of the more popular ways of encouraging bids was for agents to say “you could offer what you think the property is worth”.

Others were more up front, saying “if you offer more you’ll get the place” or simply “you can offer more”.

Sophie said she never did bid higher because she feared it would normalise the behaviour, and make it more difficult for others to secure rentals.

“The best advice that I can give to people is just to try and stay positive,” she said.

The Rental Affordability Index (RAI), published by National Shelter, Community Sector Banking, Brotherhood St Laurence and SGS Economics & Planning, is a price index for rental markets.

Its most recent report found Brisbane to now be the second-least affordable capital city for rents, which have risen over 17 per cent in the 12 months to June 2022.

The rental squeeze is also borne out in figures published by the Real Estate Institute Queensland (REIQ).

The statewide vacancy rate was sitting at 0.8 per cent at the close of last year, well below the 2.6 per cent figure the institute considers a healthy market.

Rental affordability has declined in the past two years. The average-income rental household now pays 27 per cent of their wage if renting at the median rate.

Rent bidding is a murky practice

In Queensland the Residential Tenancies and Rooming Accommodation Act governs the relationship between tenants and lessors, as well as the way property managers conduct tenancy relationships.

Under the law, rent bidding is prohibited. 

But REIQ CEO Antonia Mercorella said it can end up being a bit of a grey area.

In Queensland, similar to New South Wales, tenants are able to offer more than the advertised price.

But the rental must be advertised at a fixed price, and agents are not able to advertise with a rent range, conduct a rental auction or proactively tell rental applicants to offer over the advertised rental price and encourage them to outbid each other.

Tenants trying to gazump each other is behaviour Godwin Beach property owner Annie Pastars has seen first hand.

She rents a self-contained two-bedroom studio at the rear of her house, and is “inundated” by offers when she lists it.

“I’ve been offered up to $200 more a week, which I wouldn’t accept because I think its unethical and it’s just adding to the whole situation,” she said.

Ms Mercorella conceded not all landlords are so principled.

“If an owner or a property manager were to start encouraging tenants to apply and offer above the asking price, potentially, then that may constitute a breach of the act,” she said.

“We’ve been encouraging the property management sector to act with the appropriate level of emotional intelligence, professionalism and showing care, and obviously understanding how stressful the current environment is for tenants.”

What can you do if an agent encourages you to bid?

There are avenues renters can take in response to an agent soliciting rental bids, even though it may not be practical in helping a tenant secure a rental.

A renter could report the potential breach to the Residential Tenancies Authority, which can take action against the offending party.

A tenant could also complain to the Office of Fair Trading, which is the licensing authority for real estate agents.

And there is always the (more costly) option of seeking independent legal advice.